NEW YORK (GenomeWeb News) – Cepheid said after the close of the market on Thursday that its fourth quarter 2013 revenues increased 23 percent year over year while its profit swung to a net loss.
For the three months ended Dec. 31, 2013, total revenues came in at $113.3 million, up from $92.4 million in the year-ago period and beating the consensus Wall Street estimate of $102.2 million.
The Sunnyvale, Calif.-based company recorded $101 million in Clinical sales in Q4, up 23 percent from $82.2 million a year ago. Commercial sales, including Clinical and Non-Clinical & Other were $95.5 million in Q4.
Clinical systems sales rose 51 percent to $20.2 million from $13.4 million in the year-ago period, while Clinical Reagent sales increased 17 percent to $80.8 million from $68.8 million in Q4 2012.
Cepheid said that it placed a record 205 GeneXpert systems in its commercial Clinical business, as well as 178 GeneXpert systems as part of its High Burden Developing Country program during the quarter.
Cepheid increased its R&D spending to $25.3 million from $17.3 million a year ago, while SG&A costs rose to $34.8 million from $25.8 million in the year-ago period.
The company posted a net loss of $10.3 million, or $.15 per share, compared to a profit of $5.6 million, or $.08 per share, in Q4 2012. On an adjusted basis, Cepheid's Q4 net income was $2.3 million, or $.03 per share, compared to adjusted net income of $14.2 million, or $.20 per share, in Q4 2012.
Its fourth quarter results included a $4.4 million, or $.06 per share, charge primarily associated with a small, non-core restructuring and impairment of certain assets resulting from a realignment of operations, the company said.
Further detailing these adjustments, Cepheid said the restructuring charge was related to the termination of a small international research team, the elimination of a non-GeneXpert clinical product line acquired in a 2007 acquisition — including the impairment of an intangible asset of approximately $1.1 million and the write-down of approximately $200,000 of inventory — and a write-off of certain manufacturing capital assets totaling about $1.3 million that management concluded will not be utilized and have no future realizable value.
"This was clearly a very strong finish to what proved to be a year of recovery for Cepheid, and we enter 2014 with confidence that our performance should not be impeded by product back orders and the associated sales force distraction, as was the case in 2012 and the first half of 2013," Cepheid Chairman and CEO John Bishop said on a conference call Thursday following the release of the earnings results.
For full-year 2013, revenues increased 21 percent to $401.3 million from $331.2 million in 2012, beating analyst expectations of $390.2 million.
Clinical sales grew 26 percent to $359.9 million from $286.3 million in 2012. Clinical Systems sales revenues were $67 million compared to $52.8 million in 2012, while Clinical Reagent sales totaled $292.9 million compared to $233.5 million in 2012.
The company placed a total of 619 GeneXpert systems in its commercial clinical business in 2013, and an additional 1,055 GeneXpert systems as part of the High Burden Developing Country (HBDC) program. As of the end of 2013, a cumulative 5,509 GeneXpert systems have been placed worldwide.
"Importantly, we shipped a record 50 Infinity systems, which compares to 31 Inifinity [systems] in 2012," Bishop noted during the call.
The HBDC program had total revenues of $65.7 million for full-year 2013, growing 84 percent.
Bishop said during the conference call that "Xpert MTB/RIF clearly continues to gain a foothold in tuberculosis programs around the world." The 1,055 GeneXpert systems placed in HBDC geographies were more than twice the number of systems placed in 2012 "and yet we remain in the very early stages of adoption in many of the geographies most challenged by tuberculosis," Bishop said. Overall, the HBDC business grew 84 percent in 2013.
The firm's R&D costs for the year climbed to $80.2 million from $71.7 million, while its SG&A costs also rose to $121.6 million from $105.2 million.
Cepheid reported a net loss of $18 million, or $.27 per share, for 2013, compared to a net loss of $20 million, or $.30 per share, in 2012, which included a charge of $15.1 million, or $.23 per share, associated with a litigation settlement. On an adjusted basis, Cepheid saw net income of $17.9 million, or $.26 per share, compared to adjusted net income of $21.8 million, or $.31 per share, in 2012, which excluded stock compensation expenses, the amortization of purchased intangible assets, a litigation settlement, and a tax benefit related to an inter-company intellectual property transaction.
Cepheid ended the year with $66.1 million in cash and cash equivalents and $8.8 million in short-term investments.
For 2014, Cepheid said that it expects total revenues in the range of $446 million to $461 million. It also expects a range of $.26 to $.21 net loss per share. On an adjusted basis, EPS is expected in the range of $.24 to $.29.
In Friday morning trade on the Nasdaq, shares of Cepheid were up 10 percent at $51.99.